Marks and Spencer chief Marc Bolland. His basic pay and pension benefits remain unchanged for the fourth successive year at his request. Photograph: AFP/Getty

Marks & Spencer's chief executive has had his pay cut by more than a third to £2.1m following disappointing clothing sales and sliding profits.

Marc Bolland and five executive directors were denied a payout from the retailer's performance share plan because they failed to hit their targets, according to its annual report published on Wednesday. Bolland, whose position is under question following two successive years of declining profits, picked up £1.2m from the scheme last year.

M&S suffered a difficult year, left with piles of unsold stock after the washed-out summer. To compound its problems, its womenswear has had poor reviews. Pre-tax profits were down 5.8% at £665m in the year to March, while earnings per share dropped 6.3%. Last month Bolland admitted clothing and homeware had underperformed.

His basic pay and pension benefits of £1.3m were unchanged for the fourth consecutive year, a freeze imposed at his request, according to the report. However, Bolland picked up a bonus worth £829,000 – 25% more than last year – pushing his earnings in cash and shares to £2.1m, down from £3.2m in 2012.

Bonus payments were appropriate when set against longer-term objectives and within the context of a challenging year for the business and wider retail sector, chairman of the remuneration committee, Steven Holliday, wrote in the report.

"The subject of executive remuneration continues to be an area of focus for shareholders and the wider public and the remuneration committee is aware of the sensitivities regarding executive pay at a time of continued economic challenge and uncertainty," he said.

If Bolland turns around M&S's fortunes he could earn £5.7m in 2014, but this would depend on strong sales in autumn-winter clothing, a collection that weighs heavily on the Dutch chief executive.

Bolland has brought in a new management team to overhaul its womenswear range, appointed a new head of general merchandise and hired the former chief executive of Debenhams, Belinda Earl, as a part-time style director.

Other changes heralded by Bolland include introducing new store formats at 337 sites – more than six out of 10 UK stores, with the rest to be upgraded by the year end. Despite the popularity of the M&S food range, the retailer has no plans to introduce an online food delivery service, arguing that the average M&S food purchase is too small to be profitable.

Bolland's declining fortunes contrast starkly with those of his Sainsbury's counterpart, Justin King, who pocketed a 23% pay rise after Britain's third-largest supermarket reported its 33rd quarter of unbroken growth.

Last month Tesco, Britain's biggest retailer, said its executives would not receive a bonus in the 2013-14 year unless they can reverse a decline in profit. The supermarket chain got off to a bad start this week when it revealed that sales in nine of its 11 global markets had fallen, including a worse than expected decline in the UK in the wake of the horsemeat scandal.